ARX Gold Corp company history: the story so far

History

A small company that moved from oil and gas into renewables and Yukon gold ended up, via a 2012 reverse merger, as ARX Gold with Queensland gold rights and going-concern doubt.

2009-2011: Searching for a direction

The company, then called Daulton Capital Corp., held a 5% interest in an Oklahoma oil well from 2008. In April 2009 it agreed to buy about 90% of Energy Solutions People Inc., which held rights to wind turbines and solar generators but had no sales or revenue, for 7,234,034 shares, with the rest to follow for 1,087,750 more. Closing was subject to conditions, and the record does not confirm whether it completed.

In February 2010 it turned to gold, signing options with Shawn Ryan on the Ballarat and Hunker claims in Canada's Yukon. Each required cash payments, exploration spending and shares. In April 2011 it agreed to buy an 80% interest in the ELA 1857 claim in Papua New Guinea for $35,000, 2,500,000 shares over five years and $3,400,000 of spending. Days later, on April 29, 2011, it terminated the Yukon options, saying the short work season made them uneconomic. Ryan kept what had been paid. The company said it had abandoned oil and gas by April 30, 2011. Later filings do not say whether the Papua New Guinea payments were made.

2012-2013: The Grimsby reverse merger

The record then goes quiet until May 22, 2012, when the company acquired Grimsby Investments Ltd, which holds rights to gold claims and tailings dumps (leftover processed rock) at Coonambula, Queensland. Grimsby's shareholders received about 4.148 billion shares, which lifted shares on issue from 60,240,003 at the end of 2011 to 4,418,240,003 a year later. The deal was accounted for as a reverse merger, with Grimsby treated as the buyer. The company became Celframe ARX Resources Corp. in May and ARX Gold Corporation in October 2012.

In August 2012 the deal was amended. A duty to convert $75,000,000 of debt into preferred shares was cancelled and $67,500,000 of the other $75,000,000 was waived. The remaining $7,500,000 was first described as a 10-year note, but a January 2013 filing described it as a discretionary royalty based on future operating profits. The company also changed auditors in December 2012, with amended filings from February 2013 showing inconsistent dates.

As of February 2013, ARX Gold was based in Brisbane, described extraction as commenced, and carried a going-concern warning, meaning doubt it could keep operating without new capital.

Written from the 7 story beats below (2009 to 22 Jan 2013), which come from the company's own announcements and filings.

Beat by beat

The events that changed the company's story, in plain English, each written against everything known about the company at the time. The dot shows whether it was good, bad or neutral for shareholders.

shares on issue market cap (log scale)

20134.42bn shares

22 Jan
This amended filing describes the company's May 22, 2012 acquisition of Grimsby Investments Ltd, which holds the ARX Springs gold project rights (gold claims and tailings at Coonambula near Eidsvold, Queensland, Australia). Grimsby's shareholders received about 4.148 billion shares plus a commitment to pay $7,500,000 in royalties, and the deal was accounted for as a reverse merger with Grimsby as the accounting acquirer. It also records that the company abandoned oil and gas by April 30, 2011, terminated the Yukon options, changed its name to Celframe ARX Resources Corp. (May 25, 2012) and then ARX Gold Corporation (October 16, 2012), and that the $7,500,000 is now described as a discretionary royalty based on future operating profits rather than the promissory note described in August 2012. The risk factors include a going-concern warning and a limited operating history in mining.
asset acquisition disposition
4.42bn sh

20124.41bn shares

31 Aug
On August 28, 2012 the company and the Grimsby Investments Ltd shareholders amended their May 2012 Share Purchase Agreement. The obligation to convert $75,000,000 of debt into preferred shares was cancelled, and $67,500,000 of the other $75,000,000 was waived. The remaining $7,500,000 is to be covered by a 10-year promissory note in favor of Endx Pte Limited and TigerSprey Pte Limited. This is the first mention in these filings of the Grimsby deal and it sharply reduces what the company owes under it; the filing says all other terms are unchanged.
material agreement
4.41bn sh

201160.2m shares

2 May
On April 29, 2011 the company and Shawn Ryan terminated the Ballarat and Hunker Yukon options, ending the gold-exploration commitments signed in February 2010. Ryan keeps all cash and shares already paid (the board consent cites 250,000 shares and $25,000 for Ballarat, and 1,000,000 shares and $25,000 for Hunker), and neither side owes the other anything further. Management's stated reason is that the short Yukon work season made the obligations not economically feasible.
material agreement termination
60.2m sh
20 Apr
On April 18, 2011 the company agreed with South Pacific Connection Limited (James Das) to buy an 80% working interest in the ELA 1857 mining claim in Papua New Guinea. It pays $35,000 and issues 2,500,000 restricted shares (500,000 a year on or before September 11, 2011-2015), and must spend $3,400,000 on the claim over five years to keep the interest. This is a new mining project that follows the Yukon options; the filing says the company may accelerate the payments.
material agreement

2010

2 Mar
On February 25, 2010 the company signed a second option with Shawn Ryan, this time on the Hunker Project, 121 claims near Dawson City, Yukon. Terms: $400,000 in cash payments, $1,730,000 in exploration spending, 1,000,000 shares due by April 2010, and a 500,000-share bonus if exploration costs exceed C$3 million. Ryan keeps a 2% net smelter royalty, reducible to 1% for $2 million. A March 1 press release corrected the property description. This builds on the Ballarat option and adds to the Yukon gold exploration commitments.
material agreement
26 Feb
On February 23, 2010 the company signed an option with Shawn Ryan to earn 100% of the Balarat (later spelled Ballarat) gold claims in the Yukon's Dawson Mining District, 38 claims at this stage. It must make staged cash payments, spend on exploration and issue shares through 2014 (cash of $400,000, expenditures of $1,260,000, 1,250,000 shares, plus a 500,000-share bonus if exploration costs exceed C$2.5 million). Ryan keeps a 2% net smelter royalty, reducible to 1% for $2 million. The company can terminate at any time, and this marks a move into gold exploration.
material agreement

2009

30 Apr
The company signed an agreement on April 25, 2009 to acquire about 90% of Energy Solutions People Inc. for 7,234,034 of its shares, with plans to buy the rest in May 2009 for 1,087,750 more shares. Energy Solutions, formed in 2007 and holding rights to wind turbines and solar generators, had not started sales or earned any revenue. This is a move into renewable energy, separate from the Oklahoma oil and gas interest, and it would issue a large number of new shares (about 8.3 million in total, from the text's figures). Closing was still subject to conditions.
material agreement